Teekay LNG Partners Reports Fourth Quarter 2019 and Annual 2019 Results

Donnerstag, 27. Februar 2020 08:00

Highlights

  • GAAP net income attributable to the partners and preferred unitholders of $67.4 million and GAAP net income per common unit of $0.77 in the fourth quarter of 2019; and $152.8 million and $1.59 per common unit, respectively, for fiscal 2019.
  • Adjusted net income(1) attributable to the partners and preferred unitholders of $50.3 million and adjusted net income per common unit of $0.56 in the fourth quarter of 2019 (excluding items listed in Appendix A to this release); and $168.7 million and $1.79 per common unit, respectively, for fiscal 2019.
  • Fiscal 2019 adjusted net income per common unit is up 136 percent from fiscal 2018; fiscal 2020 adjusted net income per common unit is expected to be 45 to 73 percent higher than fiscal 2019.
  • Total adjusted EBITDA(1) of $184.2 million in the fourth quarter of 2019; and $684.7 million for fiscal 2019.
  • Took delivery of the fifth and sixth 50 percent-owned ARC7 LNG carrier newbuildings in late-2019.
  • The Bahrain LNG Joint Venture (in which Teekay LNG owns a 30 percent interest) completed mechanical construction and commissioning of the Bahrain LNG regasification terminal and began receiving terminal use payments.
  • In January 2020, Awilco LNG ASA (Awilco) fulfilled its obligation to repurchase two of Teekay LNG's vessels, resulting in over $260 million of deleveraging and over $100 million increase in liquidity for the Partnership.
  • In November 2019, Teekay LNG announced a 32 percent increase in its cash distributions to $1.00 per common unit per annum, effective with the first quarter of 2020 distribution to be paid in May.  In addition, since November 2019, the Partnership has repurchased over 563,700 common units for a total cost of $7.4 million and an average price of $13.15 per unit.

HAMILTON, Bermuda, Feb. 27, 2020 (GLOBE NEWSWIRE) -- Teekay GP L.L.C., the general partner of Teekay LNG Partners L.P. (Teekay LNG or the Partnership) (NYSE: TGP), today reported the Partnership’s results for the quarter and year ended December 31, 2019.

Consolidated Financial Summary

 Three Months EndedYear Ended
 December 31, 2019September 30, 2019December 31, 2018December 31, 2019December 31, 2018
(in thousands of U.S. Dollars, except per unit data)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)
GAAP FINANCIAL COMPARISON     
Voyage revenues148,797 149,655 149,805 601,256 510,762 
Income from vessel operations83,604 71,611 65,164 299,253 147,809 
Equity income30,207 21,296 949 58,819 53,546 
Net income attributable to the partners and preferred unitholders67,370 47,368 6,579 152,790 28,369 
Limited partners’ interest in net income per common unit0.77 0.51 0.00 1.59 0.03 
NON-GAAP FINANCIAL COMPARISON     
Total adjusted revenues(1)246,414 240,134 225,691 935,474 777,150 
Total adjusted EBITDA(1)184,168 180,216 150,099 684,667 515,292 
Distributable cash flow (DCF)(1)71,350 70,925 51,211 252,819 158,882 
Adjusted net income attributable to the partners and preferred unitholders(1)50,342 50,514 32,636 168,656 87,703 
Limited partners’ interest in adjusted net income per common unit0.56 0.55 0.32 1.79 0.76 
           

(1) These are non-GAAP financial measures. Please refer to “Definitions and Non-GAAP Financial Measures” and the Appendices to this release for definitions of these terms and reconciliations of these non-GAAP financial measures as used in this release to the most directly comparable financial measures under United States generally accepted accounting principles (GAAP).

Fourth Quarter of 2019 Compared to Fourth Quarter of 2018

GAAP net income and non-GAAP adjusted net income attributable to the partners and preferred unitholders for the three months ended December 31, 2019, compared to the same quarter in the prior year, were positively impacted by: earnings from the seven liquefied natural gas (LNG) carrier newbuildings which delivered into the Partnership’s consolidated fleet and equity-accounted joint ventures between December 2018 and December 2019; higher earnings from the Torben Spirit upon redeployment at a higher charter rate in December 2018; a decrease in off-hire days for certain of the Partnership's vessels; higher earnings from the Partnership’s 52 percent-owned joint venture with Marubeni Corporation (the MALT Joint Venture) as a result of the one-year charter contracts that were secured at higher rates for the Arwa Spirit and Marib Spirit in June and July 2019, respectively; higher earnings from the Partnership’s 50 percent-owned joint venture with Exmar NV (the Exmar LPG Joint Venture) from higher charter rates earned; and improved results from the Partnership's seven multi-gas carriers. These increases were partially offset by a reduction in earnings due to the sale of the Partnership's four remaining conventional crude oil tankers between October 2018 and October 2019.

In addition, GAAP net income attributable to the partners and preferred unitholders was positively impacted for the three months ended December 31, 2019, compared to the same quarter of the prior year, by various items, including  unrealized gains on non-designated derivative instruments in the fourth quarter of 2019, compared to unrealized losses on non-designated derivative instruments in the fourth quarter of 2018; and the gain recognized in the fourth quarter of 2019 upon derecognition of vessels and reclassification as sales-type leases for the Partnership's two LNG carriers on charter to Awilco, compared to impairment charges recorded in the fourth quarter of 2018 relating to the Partnership's goodwill attributable to its liquefied petroleum gas (LPG) segment.

CEO Commentary

“For both the fourth quarter and the full year 2019, Teekay LNG recorded strong financial results through successfully completing our newbuilding program in late-2019 and securing attractive time-charters during the year," commented Mark Kremin, President and Chief Executive Officer of Teekay Gas Group Ltd. "By virtue of having our LNG fleet 97 percent fixed through fiscal 2020, we are well-insulated from the current weakness in the spot LNG shipping market and the low price of natural gas in international markets," commented Mr. Kremin. "Looking ahead to 2020, we remain confident that our results will fall within the anticipated guidance ranges for the year presented at our Investor Day event in November 2019, with adjusted net income between $2.60 to $3.10 per unit, which is 45 to 73 percent higher than our actual 2019 adjusted net income per unit of $1.79."

"In the fourth quarter of 2019, we concluded our 6-year, $3.5 billion newbuilding program with the successful delivery of our last two Yamal ice-breaking LNG newbuildings to our Yamal LNG Joint Venture, upon which they immediately commenced fixed-rate time-charter contracts. Notably, these LNG carriers were delivered approximately three months ahead of schedule, resulting in an additional three months of charter hire to our Yamal LNG Joint Venture. In addition, the Bahrain regasification terminal completed mechanical construction and commissioning. With our orderbook now complete and our fully-delivered LNG fleet fixed on period charters, the Partnership is expected to benefit from its long-term contracted cash flows, and to continue allocating capital in a manner that focuses on the delevering and strengthening of its balance sheet while also returning capital to unitholders.”

Summary of Recent Events

Bahrain LNG W.L.L. (BLNG), in which Teekay LNG owns a 30 percent interest, announced that it had completed the mechanical construction and commissioning of the Bahrain Regasification Terminal (Terminal) and that the customer had commenced payments to BLNG under its 20-year terminal use agreement in early-January 2020. BLNG also reported that the customer is looking forward to the commencement of commercial operations of the Terminal. The Bahrain Spirit floating storage unit (FSU) (which is 100 percent-owned by Teekay LNG) continues to be chartered to BLNG. Depending on the seasonal requirements for regasification services by the Terminal, BLNG may trade the Bahrain Spirit FSU in the short-term LNG shipping market. Regardless of the deployment strategy utilized by the customer, BLNG will receive its full contractual payments from the customer of the Terminal, and Teekay LNG will continue to receive its full, fixed-rate charter-hire for the Bahrain Spirit FSU from BLNG.

In January 2020, Awilco fulfilled its obligation to repurchase two of Teekay LNG's LNG carriers, Wilforce and Wilpride, for a total of over $260 million. Teekay LNG received net cash proceeds of over $100 million after the repayment of approximately $157 million of debt secured by these two vessels.

In November and December 2019, the Partnership took delivery of the fifth and sixth 50 percent-owned ARC7 LNG carrier newbuildings, respectively, the Georgiy Ushakov and Yakov Gakkel, which immediately commenced their 26-year charter contracts servicing the Yamal LNG project.

On October 16, 2019, the Partnership sold its last remaining conventional tanker, the Alexander Spirit, for net proceeds of $11.5 million.

In December 2018, the board of directors of Teekay LNG's general partner approved a $100 million common unit repurchase program. Since that time, the Partnership has repurchased a total of 2.825 million common units, or approximately 3.5 percent of the outstanding common units immediately prior to commencement of the program, for a total cost of $36.3 million, representing an average repurchase price of $12.85 per unit.

Operating Results

The following table highlights certain financial information for Teekay LNG’s three segments: the Liquefied Natural Gas Segment, the Liquefied Petroleum Gas Segment and the Conventional Tanker Segment (please refer to the “Teekay LNG’s Fleet” section of this release below and Appendices D and E for further details). The Partnership sold its last conventional tanker in October 2019.

 Three Months Ended
 December 31, 2019December 31, 2018
(in thousands of U.S. Dollars)(unaudited)(unaudited)
 Liquefied Natural Gas SegmentLiquefied Petroleum Gas SegmentConventional Tanker SegmentTotalLiquefied Natural Gas SegmentLiquefied Petroleum Gas SegmentConventional Tanker SegmentTotal
GAAP FINANCIAL COMPARISON        
Voyage revenues138,436 10,347 14 148,797 135,777 7,253 6,775 149,805 
Income (loss) from vessel operations85,522 (1,801)(117)83,604 68,924 (5,367)1,607 65,164 
Equity income (loss)28,468 1,739  30,207 4,252 (3,303) 949 
NON-GAAP FINANCIAL COMPARISON        
Consolidated adjusted EBITDA(i)112,547 188 (117)112,618 99,981 (2,781)2,099 99,299 
Adjusted EBITDA from equity-accounted vessels(i)61,454 10,096  71,550 43,893 6,907  50,800 
Total adjusted EBITDA(i)174,001 10,284 (117)184,168 143,874 4,126 2,099 150,099 
                 

(i) These are non-GAAP financial measures. Please refer to “Definitions and Non-GAAP Financial Measures” and the Appendices to this release for definitions of these terms and reconciliations of these non-GAAP financial measures as used in this release to the most directly comparable financial measures under GAAP.

Liquefied Natural Gas Segment

Income from vessel operations and consolidated adjusted EBITDA(1) for the liquefied natural gas segment for the three months ended December 31, 2019, compared to the same quarter of the prior year, were positively impacted primarily by: the deliveries of two wholly-owned LNG carrier newbuildings (the Sean Spirit and Yamal Spirit) between December 2018 and January 2019; higher earnings from the Torben Spirit upon redeployment in December 2018 at a higher charter rate; and a decrease in off-hire days for certain of the Partnership's vessels. In addition, income from vessel operations for the liquefied natural gas segment was positively impacted by the gain recognized in the fourth quarter of 2019 upon derecognition of vessels and reclassification as sales-type leases for the Partnership's two LNG carriers on charter to Awilco.

Equity income and adjusted EBITDA from equity-accounted vessels(1) for the liquefied natural gas segment for the three months ended December 31, 2019, compared to the same quarter of the prior year, were positively impacted primarily by: the deliveries of four ARC7 LNG carrier newbuildings between June and December 2019 to the Partnership’s 50 percent-owned Yamal LNG Joint Venture; the delivery of an LNG carrier newbuilding in January 2019 to the Partnership's 20 percent-owned joint venture with China LNG Shipping (Holdings) Limited, CETS Investment Management (HK) Co. Limited and BW LNG Investments Pte. Ltd. (the Pan Union Joint Venture); and higher earnings from the Partnership’s 52 percent-owned MALT Joint Venture as a result of the one-year charter contracts that were secured at higher rates for the Arwa Spirit and Marib Spirit in June and July 2019, respectively. In addition, GAAP equity income was positively impacted by unrealized gains on non-designated derivative instruments in the Partnership's equity-accounted joint ventures in the fourth quarter of 2019 compared to unrealized losses on designated and non-designated derivative instruments in the fourth quarter of 2018.

Liquefied Petroleum Gas Segment

Loss from vessel operations and Consolidated Adjusted EBITDA(1) for the liquefied petroleum gas segment for the three months ended December 31, 2019, compared to the same quarter of the prior year, were positively impacted by improved results from the Partnership's seven multi-gas carriers, which earned higher spot revenues during the fourth quarter of 2019.

Equity income (loss) and adjusted EBITDA from equity-accounted vessels(1) for the liquefied petroleum gas segment for the three months ended December 31, 2019, compared to the same quarter of the prior year, were positively impacted by higher charter rates earned in the Partnership’s 50 percent-owned Exmar LPG Joint Venture.

Conventional Tanker Segment

(Loss) income from vessel operations and consolidated adjusted EBITDA(1) for the conventional tanker segment for the three months ended December 31, 2019, compared to the same quarter of the prior year, were negatively impacted by the sales of the African Spirit, European Spirit, Toledo Spirit and Alexander Spirit between October 2018 and October 2019.

(1) These are non-GAAP financial measures. Please refer to “Definitions and Non-GAAP Financial Measures” and the Appendices to this release for definitions of these terms and reconciliations of these non-GAAP financial measures as used in this release to the most directly comparable financial measures under GAAP.
Teekay LNG's Fleet

The following table summarizes the Partnership’s fleet as of February 1, 2020. The Partnership also owns a 30 percent interest in a regasification terminal in Bahrain which has recently completed construction.

 Number of Vessels
 Owned and In-Chartered Vessels(i)
LNG Carrier Fleet47(ii)
LPG/Multi-gas Carrier Fleet30(iii)
Total77
  
  1. Includes vessels leased by the Partnership from third parties and accounted for as finance leases.
  2. The Partnership’s ownership interests in these vessels range from 20 percent to 100 percent.
  3. The Partnership’s ownership interests in these vessels range from 50 percent to 100 percent.

Liquidity

As of December 31, 2019, the Partnership had total liquidity of $326.4 million (comprised of $160.2 million in cash and cash equivalents and $166.2 million in undrawn credit facilities). Giving proforma effect to Awilco's fulfillment of their repurchase obligations of the WilForce and WilPride from Teekay LNG in early-January 2020, the Partnership's total liquidity as at December 31, 2019 would have been $428.2 million.

Conference Call

The Partnership plans to host a conference call on Thursday, February 27, 2020 at 12:00 p.m. (ET) to discuss the results for the fourth quarter and year ended December 31, 2019. All unitholders and interested parties are invited to listen to the live conference call by choosing from the following options:

  • By dialing (800) 367-2403 or (647) 490-5367, if outside North America, and quoting conference ID code 7620501.
  • By accessing the webcast, which will be available on Teekay LNG’s website at www.teekay.com (the archive will remain on the website for a period of one year).

An accompanying Fourth Quarter and Fiscal Year 2019 Earnings Presentation will also be available at www.teekay.com in advance of the conference call start time.

About Teekay LNG Partners L.P.

Teekay LNG Partners is one of the world's largest independent owners and operators of LNG carriers, providing LNG and LPG services primarily under long-term, fee-based charter contracts through its interests in 47 LNG carriers, 23 mid-size LPG carriers, and seven multi-gas carriers. The Partnership's ownership interests in these vessels range from 20 to 100 percent. In addition, the Partnership owns a 30 percent interest in an LNG regasification terminal. Teekay LNG Partners is a publicly-traded master limited partnership formed by Teekay Corporation (NYSE: TK) as part of its strategy to expand its operations in the LNG and LPG shipping sectors.

Teekay LNG Partners’ common units and preferred units trade on the New York Stock Exchange under the symbols “TGP”, “TGP PR A” and “TGP PR B”, respectively.

For Investor Relations
enquiries contact:

Ryan Hamilton
Tel: +1 (604) 609-2963
Website: www.teekay.com

Definitions and Non-GAAP Financial Measures

This release includes various financial measures that are non-GAAP financial measures as defined under the rules of the SEC. These non-GAAP financial measures which include Adjusted Net Income Attributable to the Partners and Preferred Unitholders, Distributable Cash Flow, Total Adjusted Revenues and Adjusted EBITDA, are intended to provide additional information and should not be considered substitutes for measures of performance prepared in accordance with GAAP. In addition, these measures do not have standardized meanings across companies, and may not be comparable to similar measures presented by other companies. These non-GAAP measures are used by management, and the Partnership believes that these supplementary metrics assist investors and other users of its financial reports in comparing financial and operating performance of the Partnership across reporting periods and with other companies.

In 2018 and prior periods, the Partnership reported Cash Flow from Vessel Operations (CFVO), as a non-GAAP measure. In the first quarter of 2019, the Partnership made certain changes to its non-GAAP financial measures to more closely align with internal management reporting, annual reporting with the SEC under Form 20-F and metrics used by certain investors. CFVO from Consolidated Vessels and Total CFVO were replaced with Consolidated Adjusted EBITDA and Total Adjusted EBITDA, respectively, for current and comparative periods.

Non-GAAP Financial Measures

Total Adjusted Revenues represents the Partnership's voyage revenues from its consolidated vessels, as shown in the Partnership's Consolidated Statements of Income, and its proportionate ownership percentage of the voyage revenues from its equity-accounted joint ventures, as shown in Appendix E of this release. Please refer to Appendix C and E of this release for a reconciliation of this non-GAAP financial measure to voyage revenues and equity income, the most directly comparable GAAP measures reflected in the Partnership’s consolidated financial statements. The Partnership's equity-accounted joint ventures are generally required to distribute all available cash to their owners. However, the timing and amount of dividends from each of the Partnership's equity-accounted joint ventures may not necessarily coincide with the operating cash flow generated from each respective equity-accounted joint venture. The timing and amount of dividends distributed by the Partnership's equity-accounted joint ventures are affected by the timing and amounts of debt repayments in the joint ventures, capital requirements of the joint ventures, as well as any cash reserves maintained in the joint ventures for operations, capital expenditures and/or as required under financing agreements.

Adjusted EBITDA represents net income before interest, taxes, and depreciation and amortization and is adjusted to exclude certain items whose timing or amount cannot be reasonably estimated in advance or that are not considered representative of core operating performance. Such adjustments include vessel and goodwill write-downs, gains or losses on sales of vessels and equity-accounted investments, unrealized gains or losses on derivative instruments, foreign exchange gains or losses, amortization of in-process contracts, adjustments for direct financing leases to a cash basis, and certain other income or expenses. Adjusted EBITDA also excludes realized gains or losses on interest rate swaps as management, in assessing the Partnership's performance, views these gains or losses as an element of interest expense and realized gains or losses on derivative instruments resulting from amendments or terminations of the underlying instruments. Consolidated Adjusted EBITDA represents Adjusted EBITDA from vessels that are consolidated on the Partnership's financial statements. Adjusted EBITDA from Equity-Accounted Vessels represents the Partnership's proportionate share of Adjusted EBITDA from its equity-accounted vessels. The Partnership does not have the unilateral ability to determine whether the cash generated by its equity-accounted vessels is retained within the entity in which the Partnership holds the equity-accounted investments or distributed to the Partnership and other owners. In addition, the Partnership does not control the timing of any such distributions to the Partnership and other owners. Adjusted EBITDA is a non-GAAP financial measure used by certain investors and management to measure the operational performance of companies. Please refer to Appendices C and E of this release for reconciliations of Adjusted EBITDA to net income and equity income, respectively, which are the most directly comparable GAAP measures reflected in the Partnership’s consolidated financial statements.

Adjusted Net Income Attributable to the Partners and Preferred Unitholders excludes items of income or loss from GAAP net income that are typically excluded by securities analysts in their published estimates of the Partnership’s financial results. The Partnership believes that certain investors use this information to evaluate the Partnership’s financial performance, as does management. Please refer to Appendix A of this release for a reconciliation of this non-GAAP financial measure to net income, and refer to footnote (3) of the Consolidated Statements of Income for a reconciliation of adjusted equity income to equity income, the most directly comparable GAAP measure reflected in the Partnership’s consolidated financial statements.

Distributable Cash Flow (DCF) represents GAAP net income adjusted for gains or losses on sales of vessels and write-down of goodwill and vessels, depreciation and amortization expense, deferred income tax and other non-cash items, estimated maintenance capital expenditures, unrealized gains and losses from non-designated derivative instruments, realized loss on interest rate swap termination, ineffectiveness for derivative instruments designated as hedges for accounting purposes, distributions relating to equity financing of newbuilding installments, distributions relating to preferred units, adjustments for direct financing and sales-type leases to a cash basis, unrealized foreign currency exchange gains or losses, adjustments relating to additional tax indemnification payments, and the Partnership’s proportionate share of such items in its equity-accounted for investments. Maintenance capital expenditures represent those capital expenditures required to maintain over the long-term the operating capacity of, or the revenue generated by, the Partnership’s capital assets. DCF is a quantitative standard used in the publicly-traded partnership investment community and by management to assist in evaluating financial performance. Please refer to Appendix B of this release for a reconciliation of this non-GAAP financial measure to net income, the most directly comparable GAAP measure reflected in the Partnership’s consolidated financial statements.

Teekay LNG Partners L.P.
Consolidated Statements of Income
(in thousands of U.S. Dollars, except unit and per unit data)

 Three Months EndedYear Ended
 December 31,September 30,December 31,December 31,December 31,
20192019201820192018
 (unaudited)(unaudited)(unaudited)(unaudited)(unaudited)
Voyage revenues148,797 149,655 149,805 601,256 510,762 
      
Voyage expenses(4,628)(4,961)(6,529)(21,387)(28,237)
Vessel operating expenses(30,706)(27,321)(30,454)(111,585)(117,658)
Time-charter hire expense(5,987)(5,336)(5,980)(19,994)(7,670)
Depreciation and amortization(33,053)(34,248)(33,079)(136,765)(124,378)
General and administrative expenses(4,829)(5,393)(7,809)(22,521)(28,512)
Gain (loss) on sales of vessel and write-down of goodwill and vessels(1)14,349 (785)(790)13,564 (54,653)
Restructuring charges(2)(339)  (3,315)(1,845)
Income from vessel operations83,604 71,611 65,164 299,253 147,809 
      
Equity income(3)30,207 21,296 949 58,819 53,546 
Interest expense(40,712)(40,574)(39,551)(164,521)(128,303)
Interest income922 1,025 964 3,985 3,760 
Realized and unrealized gain (loss) on non-designated derivative instruments(4)4,352 (3,270)(11,540)(13,361)3,278 
Foreign currency exchange (loss) gain(5)(4,545)2,879 (7,244)(9,640)1,371 
Other (expense) income(6)(1,767)(1,174)545 (2,454)(51,373)
Net income before income tax expense72,061 51,793 9,287 172,081 30,088 
Income tax expense(985)(1,442)(42)(7,477)(3,213)
Net income71,076 50,351 9,245 164,604 26,875 
      
Non-controlling interest in net income3,706 2,983 2,666 11,814 (1,494)
Preferred unitholders' interest in net income6,426 6,426 6,425 25,702 25,701 
General partner's interest in net income1,218 820 2 2,542 53 
Limited partners’ interest in net income59,726 40,122 152 124,546 2,615 
Limited partners' interest in net income per common unit:     
• Basic0.77 0.51 0.00 1.59 0.03 
• Diluted0.77 0.51 0.00 1.59 0.03 
Weighted-average number of common units outstanding:     
• Basic77,509,379 78,012,514 79,676,541 78,177,189 79,672,435 
• Diluted77,615,829 78,106,770 79,843,339 78,268,412 79,842,328 
Total number of common units outstanding at end of period77,509,411 77,509,411 79,360,719 77,509,411 79,360,719 
           

(1) In December 2019, the Partnership recognized a gain of $14.3 million for the three months and year ended December 31, 2019 on derecognition of two LNG carriers on charter to Awilco as they were reclassified as sales-type leases upon Awilco obtaining credit approval for a financing facility that would provide the funds necessary for Awilco to fulfill its purchase obligation to the Partnership. In September 2019, the Partnership recorded a write-down of $0.8 million for the three months ended September 30, 2019 and year ended December 31, 2019 on the Alexander Spirit, compared to a write-down of $13.0 million for the same vessel during the year ended December 31, 2018 to its then estimated fair value. In June 2018, the Partnership wrote-down four of its wholly-owned multi-gas carriers (the Napa Spirit, Pan Spirit, Camilla Spirit and Cathinka Spirit) and recorded an impairment charge of $33.0 million for the year ended December 31, 2018. In addition, for the year ended December 31, 2018, the Partnership recorded an aggregate write-down of $7.9 million on the European Spirit and African Spirit conventional tankers.

Included in gain (loss) on sales of vessels and write-down of goodwill and vessels for the three months and year ended December 31, 2018 is an impairment change of $0.8 million relating to the Partnership's goodwill attributable to its LPG segment.

(2) For the three months and year ended December 31, 2019, the Partnership incurred restructuring charges of $0.3 million from subsidiaries of Teekay Corporation attributable to employees that previously supported the Partnership. In January 2019 and February 2018, the Toledo Spirit and Teide Spirit, respectively, were sold and as a result of these sales, the Partnership recorded restructuring charges of $2.9 million and $1.8 million for the years ended December 31, 2019 and 2018, respectively, relating to seafarer severance costs.

(3) The Partnership’s proportionate share of items within equity income as identified in Appendix A of this release is detailed in the table below. By excluding these items from equity income, the Partnership believes the resulting adjusted equity income is a normalized amount that can be used to better evaluate the financial performance of the Partnership’s equity-accounted investments. Adjusted equity income is a non-GAAP financial measure.

 Three Months EndedYear Ended
 December 31,September 30,December 31,December 31,December 31,
 20192019201820192018
Equity income30,207 21,296 949 58,819 53,546 
Proportionate share of unrealized (gain) loss on non-designated interest rate swaps(6,271)5,150 4,736 8,341 (9,076)
Proportionate share of ineffective portion of hedge-accounted interest rate swaps  4,831  (342)
Proportionate share of loss on sale of vessel    257 
Gain on sale of equity-accounted investment    (5,563)
Proportionate share of other items1,436 (77)181 2,828 (4)
Equity income adjusted for items in Appendix A25,372 26,369 10,697 69,988 38,818 
           

(4) The realized (losses) gains on non-designated derivative instruments relate to the amounts the Partnership actually paid or received to settle non-designated derivative instruments and the unrealized gains (losses) on non-designated derivative instruments relate to the change in fair value of such non-designated derivative instruments, as detailed in the table below:

 Three Months EndedYear Ended
 December 31,September 30,December 31,December 31,December 31,
 20192019201820192018
Realized (losses) gains relating to:     
Interest rate swap agreements(2,683)(2,621)(2,804)(10,081)(14,654)
Interest rate swap agreements termination    (13,681)
Foreign currency forward contracts(147)  (147) 
Toledo Spirit time-charter derivative contract  (668) 1,480 
 (2,830)(2,621)(3,472)(10,228)(26,855)
Unrealized gains (losses) relating to:     
Interest rate swap agreements6,849 (215)(7,637)(2,891)31,061 
Interest rate swaption agreements    2 
Foreign currency forward contracts333 (434) (202) 
Toledo Spirit time-charter derivative contract  (431)(40)(930)
 7,182 (649)(8,068)(3,133)30,133 
Total realized and unrealized gains (losses) on non-designated derivative instruments4,352 (3,270)(11,540)(13,361)3,278 
           

(5) For accounting purposes, the Partnership is required to revalue all foreign currency-denominated monetary assets and liabilities based on the prevailing exchange rates at the end of each reporting period. This revaluation does not affect the Partnership’s cash flows or the calculation of distributable cash flow, but results in the recognition of unrealized foreign currency translation gains or losses in the Consolidated Statements of Income.

Foreign currency exchange (loss) gain includes realized losses relating to the amounts the Partnership paid to settle the Partnership’s non-designated cross currency swaps that were entered into as economic hedges in relation to the Partnership’s Norwegian Kroner (NOK) denominated unsecured bonds. Foreign currency exchange (loss) gain also includes unrealized gains (losses) relating to the change in fair value of such derivative instruments and unrealized (losses) gains on the revaluation of the NOK bonds as detailed in the table below:

 Three Months EndedYear Ended
 December 31,September 30,December 31,December 31,December 31,
 20192019201820192018
Realized losses on cross-currency swaps(1,109)(1,431)(1,607)(5,061)(6,533)
Realized losses on cross-currency swaps termination    (42,271)
Realized gains on repurchase of NOK bonds    42,271 
Unrealized gains (losses) on cross currency swaps12,579 (23,759)(28,494)(13,239)21,240 
Unrealized (losses) gains on revaluation of NOK bonds(11,877)22,167 21,066 5,810 (23,118)
           

(6) Other (expense) income for the three months ended September 30, 2019 and year ended December 31, 2019 included $1.4 million loss recognized relating to the Torben Spirit sale-leaseback refinancing completed in September 2019. In addition, other (expense) income for the year ended December 31, 2018 included a $53.0 million expense for the recognition of an additional tax indemnification guarantee liability recorded within the consolidated Teekay Nakilat Corporation (the RasGas II Joint Venture), which was settled in 2018.

Teekay LNG Partners L.P.
Consolidated Balance Sheets
(in thousands of U.S. Dollars)

 As at December 31,As at September 30,As at December 31,
 201920192018
 (unaudited)(unaudited)(unaudited)
ASSETS   
Current   
Cash and cash equivalents160,221 142,860 149,014 
Restricted cash – current57,889 58,109 38,329 
Accounts receivable13,460 14,649 20,795 
Prepaid expenses6,796 9,383 8,076 
Current portion of derivative assets355 464 835 
Current portion of net investments in direct financing and sale-type leases273,986 13,365 12,635 
Current portion of advances to equity-accounted joint ventures73,933 79,108 79,108 
Advances to affiliates5,143 17,471 8,229 
Vessel held for sale 11,515  
Other current assets238 238 2,306 
Total current assets592,021 347,162 319,327 
    
Restricted cash – long-term35,181 33,562 35,521 
    
Vessels and equipment   
At cost, less accumulated depreciation1,335,397 1,604,581 1,657,338 
Vessels related to finance leases, at cost, less accumulated depreciation1,691,945 1,698,545 1,585,243 
Operating lease right-of-use asset34,157 37,431  
Advances on newbuilding contracts  86,942 
Total vessels and equipment3,061,499 3,340,557 3,329,523 
Investments in and advances to equity-accounted joint ventures1,081,383 1,017,994 1,037,025 
Net investments in direct financing and sales-type leases544,823 548,072 562,528 
Other assets13,038 11,960 11,432 
Derivative assets1,834 301 2,362 
Intangible assets – net43,366 45,580 52,222 
Goodwill34,841 34,841 34,841 
Total assets5,407,986 5,380,029 5,384,781 
    
    
LIABILITIES AND EQUITY   
Current   
Accounts payable5,094 2,426 3,830 
Accrued liabilities76,752 78,701 74,753 
Unearned revenue28,759 25,732 30,108 
Current portion of long-term debt599,065 390,569 135,901 
Current obligations related to finance leases69,982 69,661 81,219 
Current portion of operating lease liabilities13,407 13,252  
Current portion of derivative liabilities38,458 37,523 11,604 
Advances from affiliates7,003 8,861 14,731 
Total current liabilities838,520 626,725 352,146 
Long-term debt1,232,331 1,437,282 1,833,875 
Long-term obligations related to finance leases1,340,922 1,358,485 1,217,337 
Long-term operating lease liabilities20,750 24,179  
Other long-term liabilities47,482 46,180 43,788 
Derivative liabilities51,006 72,466 55,038 
Total liabilities3,531,011 3,565,317 3,502,184 
Equity   
Limited partners – common units1,543,598 1,497,544 1,496,107 
Limited partners – preferred units285,159 285,159 285,159 
General partner50,241 49,303 49,271 
Accumulated other comprehensive (loss) income(57,312)(71,757)2,717 
Partners' equity1,821,686 1,760,249 1,833,254 
Non-controlling interest55,289 54,463 49,343 
Total equity1,876,975 1,814,712 1,882,597 
Total liabilities and total equity5,407,986 5,380,029 5,384,781 
       

Teekay LNG Partners L.P.
Consolidated Statements of Cash Flows
(in thousands of U.S. Dollars)

 Year Ended
 December 31,December 31,
 20192018
 (unaudited)(unaudited)
Cash, cash equivalents and restricted cash provided by (used for)  
OPERATING ACTIVITIES  
Net income164,604 26,875 
Non-cash and non-operating items:  
Unrealized loss (gain) on non-designated derivative instruments3,133 (30,133)
Depreciation and amortization136,765 124,378 
(Gain) loss on sales of vessels and write-down of goodwill and vessels(13,564)54,653 
Unrealized foreign currency exchange loss (gain) including the effect of the termination of cross currency swaps2,805 (7,525)
Equity income, net of dividends received of $40,303 (2018 – $14,421)(18,516)(39,125)
Amortization of deferred financing issuance costs included in interest expense8,135 8,720 
Other non-cash items7,634 (10,495)
Change in non-cash operating assets and liabilities5,899 19,218 
Expenditures for dry docking(12,358)(15,368)
Receipts from direct financing and sales-type leases17,073  
Net operating cash flow301,610 131,198 
FINANCING ACTIVITIES  
Proceeds from issuance of long-term debt186,566 1,135,304 
Scheduled repayments of long-term debt and settlement of related swaps(132,627)(506,437)
Prepayments of long-term debt and settlement of related swaps(188,787)(465,122)
Financing issuance costs(1,149)(11,932)
Proceeds from financing related to sales and leaseback of vessels317,806 370,050 
Extinguishment of obligations related to finance leases(111,617) 
Scheduled repayments of obligations related to finance leases(71,726)(59,722)
Repurchase of common units(25,728)(3,786)
Cash distributions paid(82,379)(70,345)
Dividends paid to non-controlling interest(90)(2,925)
Net financing cash flow(109,731)385,085 
INVESTING ACTIVITIES  
Expenditures for vessels and equipment, net of warranty settlement(97,895)(686,148)
Capital contributions and advances to equity-accounted joint ventures(72,391)(40,544)
Proceeds from sales of vessels11,515 28,518 
Acquisition of non-controlling interest in certain of the Partnership's subsidiaries(2,681) 
Proceeds from sale of equity-accounted joint venture 54,438 
Receipts from direct financing leases 10,882 
Net investing cash flow(161,452)(632,854)
   
Increase (decrease) in cash, cash equivalents and restricted cash30,427 (116,571)
Cash, cash equivalents and restricted cash, beginning of the year222,864 339,435 
Cash, cash equivalents and restricted cash, end of the year253,291 222,864 
     

Teekay LNG Partners L.P.
Appendix A - Reconciliation of Non-GAAP Financial Measures
Adjusted Net Income
(in thousands of U.S. Dollars)

 Three Months EndedYear Ended
 December 31,December 31,
 2019201820192018
 (unaudited)(unaudited)(unaudited)(unaudited)
Net income – GAAP basis71,076 9,245 164,604 26,875 
Less: Net (income) loss attributable to non-controlling interests(3,706)(2,666)(11,814)1,494 
Net income attributable to the partners and preferred unitholders67,370 6,579 152,790 28,369 
Add (subtract) specific items affecting net income:    
(Gain) loss on sales of vessels and write-down of goodwill and vessels(1)(14,349)790 (13,564)54,653 
Restructuring charges(2)339  3,315 1,845 
Unrealized foreign currency exchange loss (gains)(3)3,436 5,604 4,021 (8,717)
Unrealized (gains) losses on non-designated and designated derivative instruments and other items from equity-accounted investees(4)(4,835)9,748 11,169 (14,728)
Unrealized (gains) losses on non-designated derivative instruments(5)(7,182)8,068 3,133 (30,133)
Realized loss on interest rate swap termination   13,681 
Other items(6)5,046 2,447 8,461 56,431 
Non-controlling interests’ share of items above(7)517 (600)(669)(13,698)
Total adjustments(17,028)26,057 15,866 59,334 
Adjusted net income attributable to the partners and preferred unitholders50,342 32,636 168,656 87,703 
     
Preferred unitholders' interest in adjusted net income6,426 6,425 25,702 25,701 
General partner's interest in adjusted net income878 524 2,859 1,240 
Limited partners’ interest in adjusted net income43,038 25,687 140,095 60,762 
Limited partners’ interest in adjusted net income per common unit, basic0.56 0.32 1.79 0.76 
Weighted-average number of common units outstanding, basic77,509,379 79,676,541 78,177,189 79,672,435 
         
  1. See Note 1 to the Consolidated Statements of Income included in this release for further details.
  2. See Note 2 to the Consolidated Statements of Income included in this release for further details.
  3. Unrealized foreign currency exchange losses (gains) primarily relate to the Partnership’s revaluation of all foreign currency-denominated monetary assets and liabilities based on the prevailing exchange rate at the end of each reporting period and unrealized (gains) losses on the cross currency swaps economically hedging the Partnership’s NOK bonds. This amount excludes the realized losses relating to the cross currency swaps for the NOK bonds. See Note 5 to the Consolidated Statements of Income included in this release for further details.
  4. Reflects the unrealized losses (gains) due to changes in the mark-to-market value of derivative instruments that are not designated as hedges for accounting purposes in the Partnership's equity-accounted investees. In addition, for the three months and year ended December 31, 2018, it includes the gain on sale by the Partnership of its 50 percent investment in its joint venture with Exmar NV, which owned the Excelsior LNG carrier (Excelsior Joint Venture); any ineffectiveness for derivative instruments designated as hedges for accounting purposes; and loss on sale of vessel within the Partnership's equity-accounted joint ventures. See Note 3 to the Consolidated Statements of Income included in this release for further details.
  5. Reflects the unrealized (gains) losses due to changes in the mark-to-market value of derivative instruments that are not designated as hedges for accounting purposes. See Note 4 to the Consolidated Statements of Income included in this release for further details.
  6. Included in other items for the three months and year ended December 31,2019 are adjustments to reflect the impact of the reclassification of the Partnership's two charter contracts with Awilco from operating leases to sale-type leases. Included in other items for the year ended December 31, 2018 is the additional tax indemnification guarantee liability of $53 million, as described in Note 6 to the Consolidated Statements of Income included in this release.
  7. Items affecting net income include items from the Partnership’s consolidated non-wholly-owned subsidiaries. The specific items affecting net income are analyzed to determine whether any of the amounts originated from a consolidated non-wholly-owned subsidiary. Each amount that originates from a consolidated non-wholly-owned subsidiary is multiplied by the non-controlling interests’ percentage share in this subsidiary to arrive at the non-controlling interests’ share of the amount. The amount identified as “non-controlling interests’ share of items above” in the table above is the cumulative amount of the non-controlling interests’ proportionate share of the other specific items affecting net income listed in the table.

Teekay LNG Partners L.P.
Appendix B - Reconciliation of Non-GAAP Financial Measures
Distributable Cash Flow (DCF)
(in thousands of U.S. Dollars, except units outstanding and per unit data)

 Three Months EndedYear Ended
 December 31,December 31,
 2019201820192018
 (unaudited)(unaudited)(unaudited)(unaudited)
     
Net income:71,076 9,245 164,604 26,875 
Add:    
Depreciation and amortization33,053 33,079 136,765 124,378 
Partnership’s share of equity-accounted joint ventures' DCF net of estimated maintenance capital expenditures(1)32,514 19,282 101,637 72,546 
Direct finance and sale-type lease payments received in excess of revenue recognized and other adjustments10,310 2,475 21,636 11,082 
Unrealized foreign currency exchange loss (gain)3,436 5,604 4,021 (8,717)
Deferred income tax and other non-cash items992 363 5,674 2,561 
Distributions relating to equity financing of newbuildings886 1,962 4,190 9,012 
Realized loss on interest rate swap termination   13,681 
Additional tax indemnification guarantee liability   53,000 
Less:    
Distributions relating to preferred units(6,426)(6,425)(25,702)(25,701)
Unrealized (gains) losses on non-designated derivative instruments(7,182)8,068 3,133 (30,133)
(Gain) loss on sales of vessels and write-down of goodwill and vessels(14,349)790 (13,564)54,653 
Estimated maintenance capital expenditures(17,411)(16,794)(69,404)(64,186)
Equity income(30,207)(949)(58,819)(53,546)
Ineffective portion on qualifying cash flow hedging instruments included in interest expense   (740)
Portion of additional tax indemnification guarantee liability previously recognized in DCF   (3,849)
Distributable Cash Flow before non-controlling interest76,692 56,700 274,171 180,916 
Non-controlling interests’ share of DCF before estimated maintenance capital expenditures(5,342)(5,489)(21,352)(22,034)
Distributable Cash Flow71,350 51,211 252,819 158,882 
Amount of cash distributions attributable to the General Partner(301)(227)(1,211)(911)
Limited partners' Distributable Cash Flow71,049 50,984 251,608 157,971 
Weighted-average number of common units outstanding, basic77,509,379 79,676,541 78,177,189 79,672,435 
Distributable Cash Flow per limited partner common unit0.92 0.64 3.22 1.98 
         

(1) The estimated maintenance capital expenditures relating to the Partnership’s share of equity-accounted joint ventures were $13.4 million and $10.3 million for the three months ended December 31, 2019 and 2018, respectively, and $47.0 million and $36.4 million for the years ended December 31, 2019 and 2018, respectively.

Teekay LNG Partners L.P.
Appendix C - Reconciliation of Non-GAAP Financial Measures
Total Adjusted Revenues and Total Adjusted EBITDA
(in thousands of U.S. Dollars)

 Three Months EndedYear Ended
 December 31,December 31,
 2019201820192018
 (unaudited)(unaudited)(unaudited)(unaudited)
Voyage revenues148,797 149,805 601,256 510,762 
Partnership's proportionate share of voyage revenue from its equity-accounted joint ventures (See Appendix E)97,617 75,886 334,218 266,388 
Total adjusted revenues246,414 225,691 935,474 777,150 
         


 Three Months EndedYear Ended
 December 31,December 31,
 2019201820192018
 (unaudited)(unaudited)(unaudited)(unaudited)
Net income71,076 9,245 164,604 26,875 
Depreciation and amortization33,053 33,079 136,765 124,378 
Interest expense, net of interest income39,790 38,587 160,536 124,543 
Income tax expense985 42 7,477 3,213 
EBITDA144,904 80,953 469,382 279,009 
     
Add (subtract) specific income statement items affecting EBITDA:    
Foreign currency exchange loss (gain)4,545 7,244 9,640 (1,371)
Other expense (income) – net1,767 (545)2,454 51,373 
Equity income(30,207)(949)(58,819)(53,546)
Realized and unrealized (gain) loss on derivative instruments(4,352)11,540 13,361 (3,278)
(Gain) loss on sales of vessels and write-down of goodwill and vessels(14,349)790 (13,564)54,653 
Direct finance and sale-type lease payments received in excess of revenue recognized and other adjustments10,310 2,475 21,636 11,082 
Amortization of in-process contracts included in voyage revenues (1,541) (5,756)
Realized loss on Toledo Spirit derivative contract (668) 1,480 
Consolidated adjusted EBITDA112,618 99,299 444,090 333,646 
Adjusted EBITDA from equity-accounted vessels (See Appendix E)71,550 50,800 240,577 181,646 
Total adjusted EBITDA184,168 150,099 684,667 515,292 
         

Teekay LNG Partners L.P.
Appendix D - Reconciliation of Non-GAAP Financial Measures
Consolidated Adjusted EBITDA by Segment
(in thousands of U.S. Dollars)

 Three Months Ended December 31, 2019Year Ended December 31, 2019
 (unaudited)(unaudited)
 Liquefied Natural Gas SegmentLiquefied Petroleum Gas SegmentConventional Tanker SegmentTotalTotal
Voyage revenues138,436 10,347 14 148,797 601,256 
Voyage (expenses) recoveries(57)(4,573)2 (4,628)(21,387)
Vessel operating expenses(25,363)(5,102)(241)(30,706)(111,585)
Time-charter hire expense(5,987)  (5,987)(19,994)
Depreciation and amortization(31,064)(1,989) (33,053)(136,765)
General and administrative (expenses) recoveries(4,392)(484)47 (4,829)(22,521)
Gain on sales of vessels and write-down of vessels14,349   14,349 13,564 
Restructuring (charges) recoveries(400) 61 (339)(3,315)
Income (loss) from vessel operations85,522 (1,801)(117)83,604 299,253 
Depreciation and amortization31,064 1,989  33,053 136,765 
Gain on sales of vessels and write-down of vessels(14,349)  (14,349)(13,564)
Direct finance and sales-type lease payments received in excess of revenue recognized and other adjustments10,310   10,310 21,636 
Consolidated adjusted EBITDA112,547 188 (117)112,618 444,090 
      
 Three Months Ended December 31, 2018Year Ended December 31, 2018
 (unaudited)(unaudited)
 Liquefied Natural Gas SegmentLiquefied Petroleum Gas SegmentConventional Tanker SegmentTotalTotal
Voyage revenues135,777 7,253 6,775 149,805 510,762 
Voyage expenses(1,099)(4,574)(856)(6,529)(28,237)
Vessel operating expenses(22,859)(4,863)(2,732)(30,454)(117,658)
Time-charter hire expense(5,980)  (5,980)(7,670)
Depreciation and amortization(30,121)(1,796)(1,162)(33,079)(124,378)
General and administrative expenses(6,794)(597)(418)(7,809)(28,512)
Write-down of goodwill and vessels (790) (790)(54,653)
Restructuring charges    (1,845)
Income (loss) from vessel operations68,924 (5,367)1,607 65,164 147,809 
Depreciation and amortization30,121 1,796 1,162 33,079 124,378 
Write-down of goodwill and vessels 790  790 54,653 
Amortization of in-process contracts included in voyage revenues(1,539) (2)(1,541)(5,756)
Direct finance lease payments received in excess of revenue recognized and other adjustments2,475   2,475 11,082 
Realized (loss) gain on Toledo Spirit derivative contract  (668)(668)1,480 
Consolidated adjusted EBITDA99,981 (2,781)2,099 99,299 333,646 
           

Teekay LNG Partners L.P.
Appendix E - Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA from Equity-Accounted Vessels
(in thousands of U.S. Dollars)

 Three Months Ended
 December 31, 2019December 31, 2018
 (unaudited)(unaudited)
 AtPartnership'sAtPartnership's
 100%Portion(1)100%Portion(1)
Voyage revenues218,416 97,617 176,177 75,886 
Voyage expenses(1,567)(788)(3,885)(1,962)
Vessel operating expenses, time-charter hire expense and general and administrative expenses(71,018)(31,535)(61,634)(27,291)
Depreciation and amortization(28,528)(13,852)(30,471)(14,643)
Income from vessel operations of equity-accounted vessels117,303 51,442 80,187 31,990 
Net interest expense(61,932)(25,641)(50,069)(20,589)
Income tax (expense) recovery(200)(107)1,048 377 
Other items including realized and unrealized gains (losses) on derivative instruments12,743 4,513 (27,773)(10,829)
Net income / equity income of equity-accounted vessels67,914 30,207 3,393 949 
Net income / equity income of equity-accounted LNG vessels64,274 28,468 9,837 4,252 
Net income (loss) / equity income (loss) of equity-accounted LPG vessels3,640 1,739 (6,444)(3,303)
     
Net income / equity income of equity-accounted vessels67,914 30,207 3,393 949 
Depreciation and amortization28,528 13,852 30,471 14,643 
Net interest expense61,932 25,641 50,069 20,589 
Income tax expense (recovery)200 107 (1,048)(377)
EBITDA from equity-accounted vessels158,574 69,807 82,885 35,804 
     
Add (subtract) specific income statement items affecting EBITDA:    
Other items including realized and unrealized (gains) losses on derivative instruments(12,743)(4,513)27,773 10,829 
Direct finance and sales-type lease payments received in excess of revenue recognized19,286 7,212 14,525 5,132 
Amortization of in-process contracts(1,758)(956)(1,804)(965)
Adjusted EBITDA from equity-accounted vessels163,359 71,550 123,379 50,800 
Adjusted EBITDA from equity-accounted LNG vessels143,164 61,454 109,564 43,893 
Adjusted EBITDA from equity-accounted LPG vessels20,195 10,096 13,815 6,907 
         

(1) The Partnership's equity-accounted vessels for the three months ended December 31, 2019 and 2018 include: the Partnership’s 40 percent ownership interest in Teekay Nakilat (III) Corporation, which owns four LNG carriers; the Partnership’s 50 percent ownership interest in the Partnership’s joint venture with Exmar NV (the Excalibur Joint Venture), which owns one LNG carrier; the Partnership’s 33 percent ownership interest in four LNG carriers servicing the Angola LNG project; the Partnership’s 52 percent ownership interest in the MALT Joint Venture, which owns six LNG carriers; the Partnership’s 50 percent ownership interest in Exmar LPG BVBA, which owns and in-charters 23 LPG carriers as at December 31, 2019, compared to 22 owned and in-chartered LPG carriers as at December 31, 2018; the Partnership’s ownership interest ranging from 20 to 30 percent in four LNG carriers as at December 31, 2019 for Shell, compared to three LNG carriers and one LNG carrier newbuilding as at December 31, 2018; the Partnership’s 50 percent ownership interest in six ARC7 LNG carriers in the Yamal LNG Joint Venture as at December 31, 2019, compared to two ARC7 LNG carriers and four ARC7 LNG carrier newbuildings as at December 31, 2018; and the Partnership's 30 percent ownership interest in the Bahrain LNG Joint Venture, which owns an LNG receiving and regasification terminal in Bahrain.

 Year Ended
 December 31, 2019December 31, 2018
 (unaudited)(unaudited)
 AtPartnership'sAtPartnership's
 100%Portion(1)100%Portion(1)
Voyage revenues767,026 334,218 612,857 266,388 
Voyage expenses(10,807)(5,359)(12,058)(6,071)
Vessel operating expenses, time-charter hire expense and general and administrative expenses(247,070)(109,063)(208,686)(93,277)
Depreciation and amortization(114,610)(55,340)(107,116)(52,883)
Loss on sale of vessel  (514)(257)
Income from vessel operations of equity-accounted vessels394,539 164,456 284,483 113,900 
Net interest expense(224,635)(91,394)(164,635)(69,532)
Income tax (expense) recovery(3,683)(1,420)802 262 
Other items including realized and unrealized (losses) gains on derivative instruments(41,197)(12,823)16,603 3,353 
Gain on sale of equity-accounted investment(2)   5,563 
Net income / equity income of equity-accounted vessels125,024 58,819 137,253 53,546 
Net income / equity income of equity-accounted LNG vessels125,944 59,600 149,981 60,228 
Net loss / equity loss of equity-accounted LPG vessels(920)(781)(12,728)(6,682)
     
Net income / equity income of equity-accounted vessels125,024 58,819 137,253 53,546 
Depreciation and amortization114,610 55,340 107,116 52,883 
Net interest expense224,635 91,394 164,635 69,532 
Income tax expense (recovery)3,683 1,420 (802)(262)
EBITDA from equity-accounted vessels467,952 206,973 408,202 175,699 
     
Add (subtract) specific income statement items affecting EBITDA:    
Other items including realized and unrealized losses (gains) on derivative instruments41,197 12,823 (16,603)(3,353)
Loss on sale of vessel  514 257 
Direct finance and sales-type lease payments received in excess of revenue recognized67,807 24,574 51,329 18,453 
Amortization of in-process contracts(6,974)(3,793)(7,242)(3,847)
Gain on sale of equity-accounted investment(2)   (5,563)
Adjusted EBITDA from equity-accounted vessels569,982 240,577 436,200 181,646 
Adjusted EBITDA from equity-accounted LNG vessels499,176 205,181 382,514 154,803 
Adjusted EBITDA from equity-accounted LPG vessels70,806 35,396 53,686 26,843 
         
  1. The Partnership's equity-accounted vessels for the year ended December 31, 2019 and 2018 include: the Partnership’s 40 percent ownership interest in Teekay Nakilat (III) Corporation, which owns four LNG carriers; the Partnership’s 50 percent ownership interest in the Excalibur Joint Venture, which owns one LNG carrier; the Partnership’s 33 percent ownership interest in four LNG carriers servicing the Angola LNG project; the Partnership’s 52 percent ownership interest in the MALT Joint Venture, which owns six LNG carriers; the Partnership’s 50 percent ownership interest in Exmar LPG BVBA, which owns and in-charters 23 LPG carriers as at December 31, 2019, compared to 22 owned and in-chartered LPG carriers as at December 31, 2018; the Partnership’s ownership interest ranging from 20 to 30 percent in four LNG carriers as at December 31, 2019 for Shell, compared to three LNG carriers and one LNG carrier newbuilding as at December 31, 2018; the Partnership’s 50 percent ownership interest in six ARC7 LNG carriers in the Yamal LNG Joint Venture as at December 31, 2019, compared to two ARC7 LNG carriers and four ARC7 LNG carrier newbuildings as at December 31, 2018; and the Partnership's 30 percent ownership interest in the Bahrain LNG Joint Venture, which owns an LNG receiving and regasification terminal in Bahrain.
  2. On January 31, 2018, the Partnership sold its 50 percent ownership interest in the Excelsior Joint Venture, which resulted in gain of $5.6 million for the year ended December 31, 2018.

Teekay LNG Partners L.P.
Appendix F - Summarized Financial Information of Equity-Accounted Joint Ventures
(in thousands of U.S. Dollars)

 As at December 31, 2019As at December 31, 2018
 (unaudited)(unaudited)
 AtPartnership'sAtPartnership's
100%Portion(1)100%Portion(1)
Cash and restricted cash, current and non-current509,065 210,736 388,820 164,247 
Other current assets62,566 27,719 91,264 33,354 
Property, plant and equipment, including owned vessels, vessels related to finance leases and operating lease right-of-use assets, advances on newbuilding contracts and LNG terminal3,112,349 1,375,570 3,649,255 1,635,850 
Net investments in sales-type and direct financing leases, current and non-current4,589,139 1,856,709 3,089,375 1,163,980 
Other non-current assets50,967 41,015 61,285 41,667 
Total assets8,324,086 3,511,749 7,279,999 3,039,098 
     
Current portion of long-term debt and obligations related to finance leases and operating leases315,247 136,573 284,150 125,984 
Current portion of derivative liabilities34,618 13,658 12,695 4,420 
Other current liabilities153,816 66,224 127,266 53,874 
Long-term debt and obligations related to finance leases and operating leases5,026,123 2,041,595 4,202,745 1,680,986 
Shareholders' loans, current and non-current346,969 126,546 367,475 131,386 
Derivative liabilities162,640 66,060 61,814 23,149 
Other long-term liabilities64,196 32,323 67,793 34,552 
Equity2,220,477 1,028,770 2,156,061 984,747 
Total liabilities and equity8,324,086 3,511,749 7,279,999 3,039,098 
     
Investments in equity-accounted joint ventures 1,028,770  984,747 
Advances to equity-accounted joint ventures 126,546  131,386 
Investments in and advances to equity-accounted joint ventures, current and non-current portions 1,155,316  1,116,133 
       

(1) The Partnership's equity-accounted vessels as at December 31, 2019 and December 31, 2018 include: the Partnership’s 40 percent ownership interest in Teekay Nakilat (III) Corporation, which owns four LNG carriers; the Partnership’s 50 percent ownership interests in the Excalibur Joint Venture, which owns one LNG carrier; the Partnership’s 33 percent ownership interest in four LNG carriers servicing the Angola LNG project; the Partnership’s 52 percent ownership interest in the MALT Joint Venture, which owns six LNG carriers; the Partnership’s 50 percent ownership interest in Exmar LPG BVBA, which owns and in-charters 23 LPG carriers as at December 31, 2019, compared to 22 owned and in-chartered LPG carriers as at December 31, 2018; the Partnership’s ownership interest ranging from 20 percent to 30 percent in four LNG carriers as at December 31, 2019 for Shell, compared to three LNG carriers and one LNG carrier newbuilding as at December 31, 2018; the Partnership’s 50 percent ownership interest in six ARC7 LNG carriers in the Yamal LNG Joint Venture as at December 31, 2019, compared to two ARC7 LNG carriers and four ARC7 LNG carrier newbuildings as at December 31, 2018; and the Partnership's 30 percent ownership interest in the Bahrain LNG Joint Venture, which owns an LNG receiving and regasification terminal in Bahrain.

Forward-Looking Statements

This release contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflect management’s current views with respect to certain future events and performance, including statements, among other things, regarding: the Partnership’s ability to be insulated from the near-term weakness in the spot LNG shipping market or international LNG markets; the Partnership’s expected 2020 financial results and the ability to achieve previously-disclosed guidance figures; expectations on future allocation of capital towards balance sheet deleveraging and returning capital to unitholders; and the ability to pay increased distributions on its common units in 2020 and beyond. The following factors are among those that could cause actual results to differ materially from the forward-looking statements, which involve risks and uncertainties, and that should be considered in evaluating any such statement: changes in production of LNG or LPG, either generally or in particular regions; changes in trading patterns or timing of start-up of new LNG liquefaction and regasification projects significantly affecting overall vessel tonnage requirements; changes in applicable industry laws and regulations and the timing of implementation of new laws and regulations; the potential for early termination of long-term contracts of existing vessels in the Partnership's fleet; higher than expected costs and expenses; general market conditions and trends, including spot, multi-month and multi-year charter rates; inability of customers of the Partnership or any of its joint ventures to make future payments under  contracts; potential further delays to the formal commencement of commercial operations of the Bahrain Regasification Terminal; the inability of the Partnership to renew or replace long-term contracts on existing vessels; potential lack of cash flow to reduce balance sheet leverage or of excess capital available to allocate towards returning capital to unitholders; and other factors discussed in Teekay LNG Partners’ filings from time to time with the SEC, including its Report on Form 20-F for the fiscal year ended December 31, 2018. The Partnership expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Partnership’s expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based.

Primary Logo

Related Links: 
Author:
Copyright GlobeNewswire, Inc. 2016. All rights reserved.
You can register yourself on the website to receive press releases directly via e-mail to your own e-mail account.